Posts Tagged ‘ksp’

Oklahoma Senator Tom Coburn dropped by the latest “make or break” meeting today of Senate budget negotiators to let the “Gang” know he is dropping out, bringing the size of the gang down to five.

According to Sen. Coburn, one of the main obstacles to a bipartisan agreement is the three Democratic Senators’ unwillingness to consider material changes to entitlement programs as part of the budget reform proposal.

With only 2 Republicans, and three Democrats remaining, Sen. Coburn’s decision lowers the odds of achieving an agreement that can be called bipartisan.

It remains to be seen whether Senator Conrad will issue a report reflecting the 3 remaining Democrats’ views, or whether the whole effort will now collapse.

Senate budget talks among the bipartisan “Gang of Six,” reportedly are coming to a close, and the team will report a proposal that will affect the upcoming debate on raising the federal debt ceiling. According to sources close to the talks, the Gang’s proposal will feature a series of votes that will lock the Senate into a committed level of budget savings. The budget targets could only be breached with a 60 or 67 vote threshold. The committees of jurisdiction – - including Senate Finance – - would be required to pass legislation to achieve the budget targets. Otherwise, an across-the-board sequestration would occur. The Gang’s plan goes easier on mandatory spending than the Ryan plan, but, overall, it achieves approximately $4 trillion in savings over a modified CBO baseline.

On Tuesday, February 8th, the Senate Finance Committee is scheduled to consider the Chairman’s proposed tax title to the FAA reauthorization bill (S. 223). Under the legislation proposed by Committee Chairman Max Baucus, the tax structure for commercial aviation would remain the same, but non-commercial aviation would see a substantial increase in the fuel tax per gallon for jet fuel from 21.8 to 35.9 cents. Fractionals would see an additional surtax of 14.1 cents per gallon for jet fuel.

Fractional programs are FAA regulated joint aircraft ownership programs that have grown up in recent years to allow more efficient use and ownershp of business aircraft. They are competitors of the commercial carriers in the high-end segment of the business travel market.

Under present law, transportation as part of a fractional ownership program is treated as commercial aviation. The lower 4.4 cent per gallon fuel tax applies and the 7.5% passenger tax applies to the amount paid for transportation, as well as the $3.70 segment tax. Under the proposal, fractional transportation would be treated as non-commercial. The regular 35.9 cent/gallon tax would apply, and Congress would add a 14.1 cent/gallon surtax specifically for fractional travel.

In testimony before the Senate Budget Committee, former Bush White House economist Lawrence Lindsey described the current income-based tax system as a “self-inflicted wound” in the economic competition between the United States and its major trading partners.

He advised Senators on the Budget panel to abandon all income-based levies and raise revenue exclusively through “a cash-flow based tax such as a Business Receipts Tax or even a Value Added Tax.”

The Senate Democratic and Republican leaderships today announced the newest members of the Senate Finance Committee. Senators Coburn and Thune will join the Committee on the Republican side. Sen. Ben Cardin will join the end of the dais in the Democratic side.

Note: Earlier, Senator Isakson was rumored to have won a seat on the Republican side. The full Senate must still ratify the selections, but that is largely a formality.

The House Committee on Ways & Means announced today that it will hold the first of a series of hearings on fundamental tax reform on Thursday, Jan. 20th.

According to the announcement, marginal income tax rates have increased and the tax based has narrowed since 1986 when Congress last enacted fundamental tax reform. The Committee will consider how the current Federal income tax with its myriad tax preferences ”discourages job creation and economic growth.”

Quoted in the hearing announcement, Chairman Dave Camp says “we have one of the highest corporate tax rates in the world, and our small businesses are struggling with continued uncertainty about individual tax rates and new regulations. It is this Committee’s responsibility to examine ways to reform the code so that it won’t be a continued barrier to economic growth and job creation.”

By a vote of 81-19, the Senate passed a bill to extend the EGTRRA and JGTRRA sunsets until 2012, increase the estate tax exemption level to $5 million, reduce the maximum rate to 35%, enact a 2% payroll tax holiday for 2011, and extend expiring tax provisions. The House Rules Committee is expected to meet later today to pass a rule for consideration of the bill in the House. Reportedly, the House is considering allowing an amendment on the estate tax provisions of the bill. Any changes that the House makes would set up a new vote in the Senate before final passage.

The Senate today voted to end debate on the bipartisan tax compromise negotiated at the White House, setting the stage for a final Senate vote within 30 hours. The final vote was 83-15, with Sens. Bingaman, Brown, Coburn, DeMint, Ensign, Gillibrand, Hagan, Lautenberg, Leahy, Sanders, Sessions, Udall, and Voinovich voting “no.” Sens. Merkley and Wyden missed the vote.

Without support from the Senate Democratic leadership, the compromise announced by the White House on December 6th, the comprehensive tax deal faces an uncertain future. The Senate Democrats are meeting today for their regular caucus meeting, and the outcome of that meeting could be decisive. If Senate Democrats agree to go along with the White House, the Senate could wrap up business early and members could return home for the holidays. If not, the compromise may be doomed. The most likely outcome is that the compromise will be changed as Senate Republican and Democratic leaders negotiate a structure for floor consideration of the bill.